Is Google Wallet the future of mobile payments, or nothing more than a money pit?

It has been two years since Google first introduced its “Wallet” service, offering its users an easy way to store credit/debit card information, as well as make purchases both offline and in-stores via their phones. In that time, the company has invested over $300 million just in acquiring digital startups to develop the app. They’ve also dedicated hundreds of developers to Wallet. Despite Google’s hard work, Google Wallet is still far from a household name and has only seen around 10 million downloads in the Google Play Store.

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So is Google’s Wallet just an endless money pit that has little hope of breaking into the mobile payment market in a big way? A new report from Bloomberg Businessweek seems to suggest the answer is “yes”.

In the report, Businessweek points to a low level of adoption as the biggest issue. Google’s plans for Wallet don’t revolve around making money from transaction fees, the idea is to collect data on consumer habits and create targeted ads. Of course for that model to actually produce much revenue, there has to be people viewing said ads.

So what’s the hold up, why isn’t Google Wallet dominating the mobile payment scene? The biggest reason is that the major U.S. carriers aren’t playing nice. It’s kind of hard to download and use the app when three out of four of the biggest carriers don’t support Wallet: Verizon, AT&T and T-Mobile. That leaves just Sprint users.

With only Sprint allowing the use of Wallet, most retailers just don’t see the need to support it, which further discourages Android users from utilizing the payment solution.

Why would AT&T, T-Mobile and Verizon block Google Wallet? The official reason is that they feel that granting access to Google Wallet involves potential security risks. Strangely enough, they don’t seem to have the same problem with the mobile payment service, Isis, which is supported by all three carriers.

So what’s needed to turn the tide? Expanding to new countries or getting bigger U.S. carriers to support the service would certainly help. Google also needs to expand the appeal of Wallet through new services and features.

Unfortunately, according to “more than half a dozen people close to the company”, Google is actually reconsidering or abandoning many of these kinds of projects. This includes the previously rumored Google Wallet card, which has reportedly been held back at the moment. Supposedly, no final decision on whether to permanently ditch the effort has been made just yet.

Google has big plans for Google Wallet, and isn’t afraid to spend a little money to realize its vision. Additionally, competing mobile payment platforms – such as Isis – aren’t exactly taking the world by storm. Google Wallet is far from dead. It may be two years old, but in many ways this is really just the beginning for Wallet.

What do you think of Google Wallet, would you utilize it if your device/carrier/country supported it? Conversely, do you feel itisa money pit and that Google’s efforts might be better focused elsewhere?